Most adult Australians know that they can appoint someone to make financial decisions on their behalf should this ever be required. But beyond this, as recent Australian Human Rights Commission research has shown, most people don’t know when these appointments can be made, what the powers and responsibilities of appointed decision makers are, or how appointments can be terminated.
This absence of knowledge enables misuse of powers of attorney – both inadvertent and intentional – to thrive. While it is hard to gauge the exact extent of the problem, instances of abuse of powers of attorney abound in every state and territory. Moreover, we do know that one in every six or seven Australians experiences elder abuse each year, which can include financial abuse.
Financial enduring powers of attorney are one important way in which a person can guard against elder abuse, by appointing one or more trusted others to manage their finances. But when those appointed to make decisions don’t know, or ignore, their responsibilities, abuse can thrive.
We need a national campaign and national resources to raise Australians’ knowledge about financial powers of attorney. One of the main inhibitors to this task is the fact that each state and territory has its own legislation on this topic.
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The differences in our state and territory laws are often minor, such as the terminology used to describe parties. But there are more significant differences, too, in the requirements of those exercising powers.
In Victoria, for instance, ‘attorneys’ are required to ‘give all practicable and appropriate effect to the principal’s wishes’. Meanwhile in Western Australia, the duty of a ‘donee’ is more broadly to ‘protect the interests of the donor’.
Other differences come down to how each state and territory has sought to ensure that safeguards are in place, while not making powers of attorney too difficult to complete. So, for instance, Victoria requires two witnesses, whereas Queensland requires only one.
None of these differences points to irreconcilable policy disagreements. But the impact is significant.
In addition to there being poor general knowledge about powers of attorney, the institutions that routinely work with, and recognise, powers of attorney, such as banks, aren’t able to have regularised national practices. Specific staff guidance in one jurisdiction – for instance about the number of decision makers that a person can appoint – may not be accurate in another.
Meanwhile people travelling or moving interstate worry that a financial enduring power of attorney executed in one jurisdiction may not be recognised in another (although mutual recognition provisions do exist).
The need for consistency in our powers of attorney laws has been recommended by numerous agencies, including way back in 2007 by a House of Representatives Committee, and then ten years later by the Australian Law Reform Commission. Last month the Parliamentary Joint Committee on Corporations and Financial Services, in a report on financial abuse, added its voice to this reform imperative.
We are yet to meet anyone who has argued against harmonisation; indeed neither of us has ever heard a cogent argument against harmonisation.
So why hasn’t harmonisation occurred?
This may indeed be because the differences in the state and territory laws are relatively slight. Harmonisation requires each state and territory to make often minor changes to its law, not because of the significance of the change itself, but in the interests of uniformity.
When confronted with the challenge that is always involved in legislating – and in changing state and territory-specific guidance materials – the local enthusiasm has simply not been there.
So what needs to happen?
Harmonisation requires a prototype to be agreed upon. That’s yet to occur.
A pathway forward is for a national model law to be developed that each state and territory then enacts, either as a stand-alone piece of legislation, or as part of broader legislation concerning future decision making.
The framework of a potential model law has already been produced by the office of the Queensland Public Advocate. This could be a starting point.
Harmonisation of our financial enduring powers of attorney laws is logical, relatively easy and cheap. As a meaningful and pragmatic elder abuse prevention strategy, it is very hard to beat. Our message, in the words of former Age Discrimination Commissioner, Kay Patterson, is simply: ‘let’s get moving and get it done’.
The Australian Human Rights Commission research on enduring powers of attorney is available here.
John Chesterman is the Queensland Public Advocate
Robert Fitzgerald is Australia’s Age Discrimination Commissioner
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